Term vs Whole Life Insurance which is better?

Whole life insurance is a contract designed to offer protection over the insured`s whole life. Needless to say, it is a great insurance cover designed to help you protect your loved ones, now and in the future. There is a vast spectrum of whole life policies, but the most common type of the whole life insurance policy is the ordinary whole life insurance, also referred to as ordinary life. By providing protection with premiums that never increase, whole life insurance is designed to provide for your family even when you can`t be there for them. However, with the many forms of insurance being offered today, most people find it hard to decide on which insurance cover to consider. Hence, this write-up is solely aimed at giving you the top four benefits of buying whole life insurance at an early age.

Term vs Whole Life Insurance

1.Build your cash value

Whole life insurance is designed to enable you to accumulate a cash value which is guaranteed to increase over time. Furthermore, it is imperative to note that when you take a whole life insurance at an early age, you are bound to build a cash value that you can borrow from for a variety of reasons. For instance, you can borrow from your policy to help pay your college fee, provide cash for any emergencies, or supplement your retirement income, just to mention but a few. However, when considering term vs whole life insurance, premiums are often higher in the whole life than for the term plan coverage.

2.Death Benefit

Whole life insurance is designed so that it pays out a lump sum to the beneficiaries when you die. Therefore, when you choose to take a whole life insurance policy at your early age, be sure you are selecting a protection that is guaranteed to last a lifetime. Furthermore, with the whole life insurance policy, your premiums will never rise, and your guaranteed amount will never change. The difference between term insurance and whole life insurance is that term insurance is designed to run for a set period. Therefore, if you intend to grow and protect your wealth, it is advisable to consider taking whole life insurance at an early age.

3.Best platform to earn dividends

As a whole life insurance policy owner, you are eligible to receive bonuses. Hence, you can utilize the dividends that you receive to increase your life insurance protection as well as grow your cash value significantly. However, it is vital to note that the dividend is not always guaranteed. Hence, you can use the dividends to reduce your premiums or build up your cash inside your policy and increase your death benefits. They are declared annually by the insurance company`s board of directors when the firm`s investment do well.

4.Guaranteed insurance

In the case of whole life insurance, once the policy is in place, your insurance will be guaranteed for the rest of your life. Therefore, if you are diagnosed with terminal or chronic diseases, you will not be forced to buy a new policy. Furthermore, it gives you the chance to add an accelerated death benefit rider at a little or no cost which will give you access to a significant portion of your death benefit during your whole life especially if you have a chronic or terminal illness.

Related: Term Life Insurance vs Whole Life insurance

About the Author

Leave a Reply